Combining Moving-Average Alignment, Momentum, and Value Filters

Summary

The screen begins with stocks whose short-term trend is positive relative to a longer moving average, whose recent ten-day return is positive but below 35%, and whose multiple moving averages cluster together. The text interprets alignment as relative stability and the return band as recent appreciation that has not become extreme. Its expanded version adds price above the Bollinger middle band, positive MACD conditions, return on equity above 10%, and price-to-book below two.

The article describes these conditions as a technical and fundamental stock-selection approach, but offers no performance data or documented test of the combined rules. It cautions that sentiment can undermine technical screens and that the focus on short and medium horizons may miss longer-term context. The accompanying sample code does not faithfully implement several stated conditions, so it should not be relied on as a complete specification. The suggested extra filters remain unvalidated proposals.

Key ideas

• The initial screen combines clustered moving averages, a bounded ten-day gain, and a medium-term trend condition.
• The expanded screen adds Bollinger and MACD signals with ROE and price-to-book thresholds.
• The article gives qualitative rationales but no backtest evidence for the screening rules.
• The sample implementation does not accurately represent all of the stated conditions.
• Short and medium horizon signals may omit longer-term trends and broader market context.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.